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BORROWINGS | 12 Months Ended
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Dec. 31, 2018
BORROWINGS |
BORROWINGS | 12. BORROWINGS
|  | At December 31, |  | At December 31,
|  | 2017 |  | 2018
|  | $ |  | $
Bank borrowings |  | 2,043,974 |  | 1,442,353
Analysis as: |  |  |  |
Short-term |  | 829,035 |  | 808,555
Long-term, current portion |  | 718,034 |  | 107,461
Subtotal for short-term |  | 1,547,069 |  | 916,016
Long-term borrowings on project assets—current |  | 142,920 |  | 208,755
Long-term, non-current portion |  | 353,985 |  | 317,582
Borrowings from non-banking institutions |  | 318,122 |  | 244,958
Analysis as: |  |  |  |
Short-term |  | 270 |  | 48,321
Long-term, current portion |  | 61,623 |  | 63,590
Subtotal for short-term |  | 61,893 |  | 111,911
Long-term borrowings on project assets—current |  | 205,873 |  | 57,015
Long-term, non-current portion |  | 50,356 |  | 76,032
Total |  | 2,362,096 |  | 1,687,311
As of December 31, 2018, the Company had contractual bank credit facilities of $2,550,067 and $706,570 was available for draw down upon demand. In addition, as of December 31, 2018, the Company also had non‑binding credit facilities of $477,973. As of December 31, 2018, short‑term borrowings of $1,041,510 and long‑term borrowings of $285,968 were secured by property, plant and equipment with carrying amounts of $322,544, inventories of $67,759, prepaid land use rights of $44,546, restricted cash of $90,021, accounts receivable of $263,947, equity of $144,255 and project assets and solar power systems of $916,490. a) Short‑term The Company’s short‑term borrowings consist of the following:
|  | At December 31, |  | At December 31,
|  | 2017 |  | 2018
|  | $ |  | $
Bank borrowings |  |  |  |
Short-term bank borrowings secured by restricted cash |  | 267,507 |  | 285,715
Short-term bank borrowings secured by inventories |  | 7,652 |  | —
Short-term bank borrowings secured by prepaid land use rights and property, plant and equipment |  | 248,502 |  | 275,000
Short-term bank borrowings secured by project assets and solar power systems |  | 2,700 |  | 45,000
Unsecured short-term borrowings |  | 302,674 |  | 202,840
Long-term borrowings due within one year |  |  |  |
Long-term borrowings due within one year secured by inventories |  | — |  | 5,003
Long-term borrowings due within one year secured by prepaid land use rights and property, plant and equipment |  | 8,313 |  | 21,686
Long-term borrowings due within one year secured by project assets and solar power systems |  | 558,721 |  | 63,736
Long-term borrowings due within one year secured by restricted cash |  | — |  | 12,493
Long-term bank borrowings due within one year secured by equity |  | 151,000 |  | —
Unsecured long-term borrowings due within one year |  | — |  | 4,543
|  | 1,547,069 |  | 916,016
Borrowings from non-banking institutions |  |  |  |
Short-term borrowings secured by project assets |  | 270 |  | —
Short-term borrowings secured by prepaid land use rights and property, plant and equipment |  | — |  | 43,711
Long-term borrowings due within one year secured by project assets |  | — |  | 23,396
Unsecured short-term borrowings |  | — |  | 4,610
Unsecured long-term borrowings due within one year |  | 61,623 |  | 40,194
|  | 61,893 |  | 111,911
Total |  | 1,608,962 |  | 1,027,927
The average interest rate on short‑term borrowings was 3.31% and 4.48% per annum for the years ended December 31, 2017 and 2018, respectively. b) Long-term borrowings on projects assets—current The Company’s long-term borrowings on project assets—current consist of the following:
|  | At December 31, |  | At December 31,
|  | 2017 |  | 2018
Bank borrowings |  | $ |  | $
Long-term borrowings on project assets-current secured by project assets |  | 131,562 |  | 208,755
Unsecured Long-term borrowings on project assets—current |  | 11,358 |  | —
Borrowings from non-banking institutions |  |  |  |
Long-term borrowings on project assets-current secured by project assets |  | 205,873 |  | 57,015
Total |  | 348,793 |  | 265,770
Certain long-term borrowings were classified as current liabilities because these borrowings are associated with certain solar power projects that are expected to be sold within one year. The average interest rate on these borrowings was 2.22% and 4.59% per annum for the years ended December 31, 2017 and 2018, respectively c) Long‑term The Company’s long‑term borrowings consist of the following:
|  | At December 31, |  | At December 31,
|  | 2017 |  | 2018
|  | $ |  | $
Bank borrowings |  |  |  |
Unsecured long-term bank borrowings |  | 87,852 |  | 97,237
Long-term bank borrowings secured by project assets and solar power systems |  | 24,640 |  | 161,628
Long-term bank borrowings secured by property, plant and equipment |  | 83,329 |  | 32,863
Long-term bank borrowings secured by equity |  | 150,000 |  | —
Long-term bank borrowings secured by restricted cash |  | — |  | 12,483
Long-term bank borrowings secured by accounts receivable |  | — |  | 8,361
Long-term borrowings secured by inventory |  | 8,164 |  | 5,010
|  | 353,985 |  | 317,582
Borrowings from non-banking institutions |  |  |  |
Long-term borrowings secured by project assets and solar power systems |  | — |  | 65,623
Unsecured long-term borrowings |  | 50,356 |  | 10,409
|  | 50,356 |  | 76,032
Total |  | 404,341 |  | 393,614
The average interest rate on long‑term borrowings was 3.06% and 2.5% per annum for the years ended December 31, 2017 and 2018, respectively. Future principal repayments on the long‑term borrowings are as follows:
2019 |  |  | 436,821
2020 |  |  | 62,255
2021 |  |  | 120,477
2022 |  |  | 48,444
2023 |  |  | 5,970
Thereafter |  |  | 156,468
Total |  |  | 830,435
Less: future principal repayment related to long-term borrowings, current portion |  |  | (436,821)
Total long-term portion |  | $ | 393,614
On January 31, 2018, Canadian Solar Japan K.K. entered into a financing agreement with Mizuho Bank, Ltd, denominated in JPY, which agreed to provide revolving long-term working capital financing of approximately $8,361. The total outstanding borrowings under this agreement equaled $8,361 at December 31, 2018. The loan is secured by inventory and accounts receivable. The agreement does not contain any financial covenants or restrictions. On March 26, 2018, Canadian Solar Projects K.K. entered into a financing agreement, denominated in JPY, with a Japanese financial institution, which agreed to provide revolving long-term working capital financing of $2,726 for Solar power project development in Japan. The outstanding borrowing under this agreement was $2,726 at December 31, 2018, which requires repayment in 2021. The loan is unsecured and guaranteed by CSI. The agreement does not contain any financial covenants or restrictions. On March 30, 2018, Lohas ECE 2 G.K., the Company's consolidated VIEs, entered into a financing agreement, denominated in JPY, with a local Japanese bank, which agreed to provide long-term project financing of $155,943 for solar power project development in Japan. The outstanding borrowing under this agreement was $78,249 at December 31, 2018, which requires repayment in 2037. The loan is secured by project assets. As of December 31, 2018, the Company met all the requirements of financial covenants. On April 5, 2018, Belgaum Renewable Energy Private Limited, the Company's 100% owned subsidiary, entered into a financing agreement, denominated in INR, with a local Indian bank, which agreed to provide long-term project financing of $14,920 for solar power project development in India. The outstanding borrowing under this agreement was $12,469 at December 31, 2018, which requires repayment in 2030. The loan is secured by project assets and guaranteed by CSI. As of December 31, 2018, the Company met all the requirements of financial covenants. On May 7, 2018, NC102 Project LLC, the Company's 100% owned subsidiary, entered into a financing agreement, denominated in USD, with Prudential Insurance, which agreed to provide long-term project financing of $55,505 for Solar power project development in North Carolina. The outstanding borrowing under this agreement was $47,250 at December 31, 2018, which requires quarterly repayment and mature in 2033. The loan is secured by project assets. The agreement does not contain any financial covenants or restrictions. On September 14, 2018, Recurrent Energy México Development, S. de R.L. de C.V, the Company's 100% owned subsidiary, entered into a financing agreement, denominated in MXN, with Bank of Banco Nacional de Comercio Exterior, which agreed to provide long-term project financing of $10,450 for Solar power project development in Mexico. The outstanding borrowing under this agreement was $8,762 at December 31, 2018, which requires repayment in 2023. The loan is secured by project assets and guaranteed by CSI. The agreement does not contain any financial covenants or restrictions. On October 31, 2018, Canadian Solar Projects K.K. entered into a financing agreement, denominated in JPY, with a Japanese financial institution, which agreed to provide revolving long-term working capital financing of $4,544 for Solar power project development in Japan. The outstanding borrowing under this agreement was $4,544 at December 31, 2018, which requires repayment in 2019. The loan is unsecured and guaranteed by CSI. The agreement does not contain any financial covenants or restrictions. The long-term borrowings disclosed above bear floating interest rates from 1.05% to 6.31% per annum. c) Interest expense The Company capitalized interest costs incurred on borrowings obtained to finance construction of solar power projects or property, plant and equipment until the asset is ready for its intended use. The interests incurred during the years ended December 31, 2016, 2017 and 2018 are as follows:
|  | Years Ended December 31
|  | 2016 |  | 2017 |  | 2018
|  | $ |  | $ |  | $
Interest capitalized—project assets |  | 47,881 |  | 13,274 |  | 15,462
Interest capitalized—solar power systems |  | 3,113 |  | — |  | —
Interest capitalized—property, plant and equipment |  | 819 |  | 1,010 |  | 1,182
Interest expense |  | 69,723 |  | 117,971 |  | 106,032
Total interest incurred |  | 121,536 |  | 132,255 |  | 122,676

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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